Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
Correct Answer
$6848
Solution And Explanation
Solution
Given,
Principal (P) = $5350
Rate of Simple Interest (SI) = 4%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $5350 × 4% × 7
= $5350 ×4/100 × 7
= 5350 × 4 × 7/100
= 21400 × 7/100
= 149800/100
= $1498
Thus, Simple Interest = $1498
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $1498
= $6848
Thus, Amount to be paid = $6848 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $5350
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5350 + ($5350 × 4% × 7)
= $5350 + ($5350 ×4/100 × 7)
= $5350 + (5350 × 4 × 7/100)
= $5350 + (21400 × 7/100)
= $5350 + (149800/100)
= $5350 + $1498 = $6848
Thus, Amount (A) to be paid = $6848 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $5350, the simple interest in 1 year
= 4/100 × 5350
= 4 × 5350/100
= 21400/100 = $214
Thus, simple interest for 1 year = $214
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $214 × 7 = $1498
Thus, Simple Interest (SI) = $1498
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $1498
= $6848
Thus, Amount to be paid = $6848 Answer
Similar Questions
(1) How much loan did David borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6210 to clear it?
(2) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $9774 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(4) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9360 to clear it?
(5) If Steven paid $5152 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Calculate the amount due if David borrowed a sum of $3400 at 3% simple interest for 3 years.
(7) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(8) What amount does David have to pay after 6 years if he takes a loan of $3400 at 3% simple interest?
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 3 years.
(10) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $11880 to clear the loan, then find the time period of the loan.